Occasionally when I post and often when I make a comment on someone else's post, I refer to the fact that the financial situation in Canada is not as bad as it is in the U.S.
Well, today that has all changed. For the first time in Canadian history we steady-as-she-goes, practical, frugal, boring, conservative and formerly smug Canadians have a higher debt to income ration than those spendthrift, carefree, live for today Americans. Yup, it's true, according to my favourite newspaper, The National Post.
Sorry for the blurry shot but online they don't let you look at the paper for free so I could only capture a screenshot of the tiny front page from their website. But I can still read the headline of the article in the upper right corner:
"Nobody Wants to Crash this Debt Party."
We have a bit of a problem and no one wants to take the blame or step up and do anything about it. The Bank of Canada feels pressured to keep lending rates really really low due to the less than stable economic environment. Banks have been encouraged to ease up on lending restrictions because more and more $$ needs to be injected into the economy so that manufacturers can keep on manufacturing. And the average Joe keeps borrowing more and more because hey - it's almost fricking free money! Let's make hay while the sun shines!! Last year's car - yuck - let's get a new one with ALL the options! Yes, I really really need 15 pairs of designer boots - baby it's cold outside! Make a meal for supper - why? when there are a hundred different restaurants out there struggling to keep afloat?? We're spending for the economy people!! We're patriotic!! We're STUPID!!!
I'm so embarrassed. I'm so disgusted. I'm so fed up.
Why don't people realize that when interest rates go back up..and they WILL go back up.. they won't be able to afford their payments?? Huh?? All of a sudden I don't feel so good...there's trouble ahead...the recession was nothing compared to what's coming...prepare yourself.
I read this earlier today (I'm the smug financial-news reader) on Bloomberg: http://noir.bloomberg.com/apps/news?pid=20601010&sid=a0TQuofb0AnQ
ReplyDeleteAustralia was told by their Government that we had managed to stay out of recession, slap yourselves on the back Aussies. And in comparison to what was happening overseas, we continued to spend go into debt and not put aside money into savings. And shortly we will be paying for that rash thinking when the s**t hits the fan.
ReplyDeleteStill my budget will be in place and my debts will be reduced, it,s all I have to offer the economy of this country.
Stop being embarrassed and enjoy the fact that you did,nt add to your Countries problems.
Scary, isn't it? I've just had 2 people tell me in the last week that we never really faced a recession in my area, not by the way people kept on spending. At least we are smart enough to take care of our finances, and can brace (prepare) for what's ahead!
ReplyDeleteThere are a lot of us who, like you, are trying to do better with our money.
ReplyDeleteSociety as a whole is in trouble though as we are built completely upon the manufacturing and buying of stuff. People want higher wages therefore the cost of production goes up therefore the cost of the item produced goes up. And round we go again. When does it stop.
4 years ago I could feed my family on 500 a month now I'm spending 900. Cheese that I used to get for $4.99 is now $8.49 and they are making the packaging smaller as well as raising the price.
We will hit a wall at some point and what will happen I cannot begin to predict. It's too scary to think about. All I can do is try hard not to have debt and to get as much into savings as I can. But there is a balance there as well. Even Scrooge couldn't live as Scrooge his whole life. We need to balance saving with careful spending on the things that make us happy.
I'm quite happy that my names not in that hat! lol!! If you don't have the cash to pay for it, you can't afford it. ;)
ReplyDeletethat is for sure - I think we all (the whole world!) need to 'chillax' with the spending. (am I too old to say it? did i take the coolness out of it? haha)
ReplyDeleteThis is why it is so important to me to get rid of this flippin debt... get a nice sized savings & a nice size savings for dd college... plus teach her how to be good with her money....
tis a long road ahead - buckle up, it gets bumpy too!
Wow, who would have thought? But then again, that is now. Tomorrow we could have that no. 1 position back again.
ReplyDeleteAnd it won't matter because we are responsible for our own economy.
Just keep saving....